Real Estate Taxation Is Now A Real Crime

(December 2009)

 

What do they say?  “If it ain’t broke, don’t fix it.”  Then when it comes to the system of real estate assessments in Philadelphia they must say, “If it is totally broken, don’t fix it and keep using it to victimize residents.”  

 

I wandered down to watch assessment appeals at the Board of Revision of Taxes to catch up on the latest installment of the farce that is real estate assessment in Philadelphia.  Even though everyone realizes that the assessments are so far from reality that the entire system must be totally revamped, the city is actually using that current system to force some residents to pay outrageous tax increases.  This goes beyond ordinary incompetence.  This is criminal — nothing short of theft — and every city official involved in this crime must be held accountable.

 

For those of you who might have missed a few episodes in this pathetic soap opera, here’s a quick recap.  It has been demonstrated conclusively that real estate assessments in Philadelphia are woefully unfair, forcing some to pay too much while others pay too little.  Even though this situation has been bad and getting worse, most politicians have shied away from fixing the problem because they fear the wrath of those who would face higher values — and higher tax bills — after the assessment mess is cleaned up. 

 

But, Michael Nutter was bold as a candidate, promising to take on this long-simmering issue and, as Mayor, declared last summer that the system “needs to be changed yesterday.”  Even the unaccountable and untouchable Board of Revision of Taxes, which actually values properties for tax purposes, publicly initiated an effort to get the values right once and for all.  But, more than a year later, and after millions of our dollars have been spent to fund the program to correct the values, the system remains as broken as ever. 

 

After recent reports described the combination of incompetence, shady dealings, and good-old Philly politics that combine to produce the fraudulent real estate assessments we continue to endure, our leaders promised action.  But, while the Mayor and City Council have been spinning their collective wheels proposing “leadership” changes and “governance” adjustments, the values are as screwed up as ever. 

 

Since he recently engineered a mayoral takeover of the Board of Revision of Taxes, the Mayor has stopped talking about fixing the system “yesterday” and administration officials are now saying that a fair and accurate system of real estate taxation is probably years away.  In the meantime, this bad situation has actually just gotten worse. 

 

Even though EVERYONE understands that real estate taxation in Philadelphia is unfair and almost certainly illegal (the law demands fairness and uniformity and our system is clearly neither), the city is still going around and whacking residents with increased assessments. 

 

Some residents have received notices that the assessed value for their properties will increase — in some cases by 200 and 300 percent and more — resulting in doubling and tripling of their tax bills.  You read that right.  Even though the assessments of the Board of Revision of Taxes have been exposed as a fraud and a sham, the city is still wasting institutional time and energy cherry picking certain homeowners and targeting them for tax increases. 

 

At the Board of Revision of Taxes appeal hearings, one aggrieved homeowner pointed out that in testimony before City Council just months ago, the Board had seemed to promise that there would be no new assessments based on the current — fraudulent — system while the effort to correct all the values was underway.  In response, the Board employed the reverse-Nuremberg defense (“we were only giving orders”), claiming that, despite the Board’s position on not performing new assessments, staffers were simply doing their jobs in continuing to evaluate properties and adjust their values.

 

Enforcing these new assessments is illegitimate and amounts to an unlawful taking.  All of the officials who are perpetrating this crime should be held responsible — if not in a civil or criminal court, then certainly at the next election. 

 

I encourage anyone who wants to review a more in-depth and thoughtful presentation about our real estate taxation mess and how to fix it to visit http://www.philadelphiaforward.org/citywide_reassessment, but here’s what has to happen immediately: 

 

  • First, the city must issue a moratorium on assessment increases until the city is prepared to roll out a system of fair and accurate assessments for all properties — justice delayed for all property owners cannot result in justice denied for some property owners.
  • Second, the city must move forward with haste to complete the a full citywide reassessment so that all property assessments reflect actual property values — unfair values is the problem that must be addressed above and beyond any other issue at the Board of Revision of Taxes.
  • Finally, if the city persists in adjusting assessments and delaying reassessment, every single taxpayer who is forced to continue to pay too much, should be due a refund for each and every year that the city’s inaction allows unfair assessment to continue — our elected officials are on notice and now that they understand that assessments are inaccurate, they are wrong to perpetuate the fraud.

Mayor Nutter is now operationally in charge of the activities at the Board of Revision of Taxes having installed his Finance Director at the agency’s helm.  If he still truly believes that this system “needs to be changed yesterday,” he should immediate rescind any new assessments and concentrate all the efforts of the agency toward establishing accurate values for all city properties.

 

If he does not, he is simply another accomplice to the crimes being committed against Philadelphia property owners.  This is an issue he once vowed to solve.  He cannot become part of the problem.